Why This Issue Is Important

Last year, the Federal Communications Commission (FCC) adopted new rules that place broadband network investments and operations of rural telecommunications companies at risk, to the detriment of rural consumers and small businesses. The FCC is also considering additional rule changes that lend to this air of uncertainty.

Rural telecommunications companies serve over 4.5 million rural consumers throughout the United States. These companies work hand-in-hand with government and private investors to deploy broadband-capable networks throughout their service areas; often, these companies are the only source of broadband in their communities.

However, the job is far from complete. Sufficient, predictable, and sustainable support is necessary not only to deploy broadband to the remaining unserved consumers, but also for ongoing network maintenance and upgrades. This is necessary to provide faster connection speeds that can accommodate an ever-growing array of bandwidth-intensive applications and services. It is also needed to maintain reasonable end-user rates for broadband, which enables consumers to afford broadband.

Federal rules provide rural communications providers (both private companies and cooperatives) with Universal Service Fund (USF) support, which reimburses these providers for a portion of the costs that they incur to bring service in high-cost rural areas. Mandatory contributions to the USF are made by all companies that provide certain communications services. Rural communications providers rely on the USF to build and maintain broadband-capable networks throughout the country, and to keep rates affordable for rural consumers.

The FCC now wants to extend the success of rural communications providers to areas served by other companies. This is a laudable goal – all Americans deserve access to affordable, high-quality broadband. While this goal could be accomplished in ways that continue to ensure broadband for all Americans, the FCC’s rules instead reduce support for small rural companies and redistribute those resources. The further changes still being considered look only to result in more cuts, caps, and constraints on broadband investment by small rural service providers. This experimental approach may reach unserved customers of other companies – although even that is unfortunately unclear at this point – but these policy changes threaten to make existing network investments of small rural providers unsustainable: many rural telecom providers would either need to charge unaffordable rates in order to cover costs, or cut spending on broadband deployment and network maintenance. Since broadband networks support tele-healthcare, tele-education, public safety, and economic activity, the negative impacts would be felt widely throughout communities served by rural communications providers.

In response to this threat, hundreds of rural providers and the associations that serve them have banded together in an unprecedented show of unity. After many months of work, the rural associations produced a plan in 2011 that meets the FCC’s key reform objectives without putting at risk the substantial investments already made by carriers and without short-changing the ability of carriers to make reasonable investments to serve customers in the future. While portions of this plan are still pending review at the FCC, the changes adopted thus far and most of the changes still being considered look only to chill broadband investment by small network operators.

We need rural customers to reach out to their members of Congress and encourage them to tell the FCC to modify its rules so they better reflect the needs of rural communications providers outlined in the rural associations’ plan. We need rural consumers to communicate also that any further changes should only be considered and made after the FCC evaluates the effects of the reforms it has already adopted. The future of access for millions of rural consumers hangs in the balance.